Imagine the result

Billability – Billable Hours, Hourly Billability and Financial Billability

Imagine the result

Imagine the result

Gross Revenue

Net Revenue

Net Revenue Multiplier

Financial Billability

Operating Income(Income after Corporate Overhead)

Return on Net Revenue (Income percent of net revenue)

Bookings

Backlog

DRO (Days Revenue Outstanding)

Key Financial Metrics

Imagine the result

Why Does Financial Billability Matter?

• Financial billability is a critical driver to our overall financial performance

• FB provides greatest ROI as the average billable hour generates 3 times its cost.

• Match staff levels to workload

• Workload forecasting or Billable Hours forecasting helps with management and delivery on projects

Imagine the resultImagine the result

Billable Hours

Imagine the result

Principles of How Billable Hours are Set

Annual goal for each employee based on hours per week, target billability percentage, plan overtime percentage and allowable benefit hours

1. Establishes direct hour targets for each employee

2. Provides a set number of hours for indirect activities (i.e. training, staff development, podcasts and business development)

3. Management over a longer time period

• More flexibility to tailor use of indirect time

• Employees must always meet project needs first

Imagine the result

Billable Hours Calculation

Example:• 40 hour per week employee, 10% overtime goal, (20 PTO + 9

holiday), 95% target billability goal• 40 hrs X 52 weeks = 2080 Regular Hours• 2080 X 10% = 208 Overtime Hours• 8 hrs X (20 PTO+ 9 holiday) = 232 Benefit Hours• Calculation: (2080 + 208 – 232) X 95% = 1953 Billable Hour Goal

Calculation: Total Available Hours (Total Regular Hours + Overtime Hours – PTO - Holidays) times Target Billability Percentage

• Total Regular Hours: Hours per week times 52 (2080 for most)• Overtime Hours: Total Regular Hours times Plan Overtime

Percentage

Imagine the result

Billable Hours Goal Change FormName Employee Number Start/Change DateSmith, John 12345 12/26/10

Year end 12/25/11Weeks 52.00

Inputs CalculationsHours per Week 40Total Regular Hours 2,080 OT % 10% - Total OT Hours 208 PTO Hours 120 (120) Holiday Hours (64) Available Hours 2,104 Billability % 80%Billable Hours 1,683

Imagine the result

Billable Hours - MyMetrics

Imagine the result

Billable Hours Report

Imagine the resultImagine the result

Hourly Billability

Imagine the result

Employee Ovt %

• 000 – Exempt employees that never get paid overtime, hours worked over 40 are considered EXTRA hours and are deducted from Indirect Labor

• 100 –Exempt employee that will get straight time overtime if 100% billable

• 150 – Non exempt employees will get paid time and a half for all overtime hours in a week

Imagine the result

Billability (Hours)

• Definition – A measure of an employee’s productivity based on hours

• Calculation: Direct Hours / Available Hours

• Direct Hours – hours charged to direct projects

• Available Hours – Total hours paid minus Benefit hours.

• Benefit Hours– PTO, Holiday, Other

• Percentage assigned to each employee to establish individual billable hours goal

Imagine the result

Billability (Hours)Overview

000 – Salary Employee

Direct Hours Divided by Available Hours

• 30 Hours Billable,13 Admin / Marketing Hours, and 8 Hours Holiday

• OT Percent = 27.5% (51-40=11 OT hours / 40 standard)

• Billability = 93.8% (30 Billable divided by 32 )(40 hours paid less 8 TOBE)

Imagine the result

Billability (Hours)Overview

100 – Paid straight time for billable hours over base

• 35 Hours Billable, 8 Training Hours, and 8 Hours Holiday

• OT Percent = 27.5% (51-40=11 OT hours / 40 standard)

• Billability = 100% (35 Billable divided by 35 )(43 hours paid less 8 TOBE)

Imagine the result

Billability (Hours)Overview

150 – Overtime Employee

• 30 Hours Billable and 13 Admin / Marketing Hours

• OT Percent = 7.5% (43-40=3 OT hours / 40 standard)

• Billability = 69.8% (30 Billable divided by 43 )(43 hours all paid)

Imagine the result

Weekly Labor Analysis by Department

Imagine the result

Labor Analysis

Imagine the resultImagine the result

Financial Billability

Imagine the result

Financial Billability• Definition – A measure of an employee’s productivity

based on dollars

• Calculation: Direct Labor $ / Total Accrued Payroll $

• Direct Labor $ – Billable hours times the employee’s direct rate (hourly pay rate)

• Total Accrued Payroll – Total Payroll(Direct and Indirect) + 11.9%(Benefit Accrual) – Benefits Taken

• Financial Billability will also vary based on employees status with regards to OT pay

Imagine the result

Financial Billability

Imagine the result

Financial Billability

Imagine the result

Financial Billability

Imagine the result

Financial Billability by Department

Imagine the result

Imagine the result

Financial Billability by Dept/by Grade

Imagine the result

Imagine the result

Imagine the result